Apart from the Covid situation, increasing urbanisation and a rise in retail food processing have pushed up the demand for cold storage facilities
The country’s cold storage capacity and cold storage real estate stock are set to grow significantly grow and could double by 2023, according to real estate consultancy CBRE.
In 2019, the storage capacity in the country was 37-39 million tonnes. Following the Covid-19 outbreak, the cold storage segment is expected to witness robust demand on the back of a surge in online grocery and fresh food sales.
CBRE South Asia, in its report, estimates the cold storage segment in India to grow steeply over the next few years on the back of a strong consumer and industrial base. Following the Covid outbreak, the demand for cold storage is also being fuelled by a wider omni-channel distribution of F&G (food and groceries) across tier I and tier II cities in the country. The cold chain network would also play a vital role in reducing the loss of produce and improving cold storage efficiencies.
Andhra Pradesh, Telangana, Uttar Pradesh, West Bengal, Gujarat, Punjab , Bihar, Madhya Pradesh, Maharashtra, Haryana and Karnataka accounted for 91 per cent of the total cold storage capacity in India in 2019. The overall cold storage real estate stock is estimated to touch 1,400-1,500 million sq. ft. by 2023.
Anshuman Magazine, Chairman, India & South East Asia, Middle East & Africa, CBRE, said: “CS facilities play an integral role in improving the shelf life of products and are an important enabler for several industries working across fresh food production and delivery; along with healthcare and other products such as flowers and chemicals. Considering the potential of the CS segment in the country, we expect that consumer/industry-led factors in India would continue to attract the interest of leading players in the coming years.”
Increasing urbanisation and a rise in retail food processing have been accelerating the demand for products that need efficient cold storage facilities. Local grocery and departmental stores are also becoming smarter and developing innovative ways to deliver food, thus expanding the market for OFD services and consequently cold storage facilities.
The emergence of the ‘cloud kitchen’ concept is also likely to boost demand for cold storage facilities. The size of the online F&G retail industry is likely to quadruple by 2022, and the dairy industry is likely to more than double by 2023.
The government initiatives to reduce post-harvest waste, encourage investment and improve logistics efficiencies are also expected to boost the overall cold storage capacity, value and real estate stock. The projected growth of F&G, online F&G, dairy, food processing and pharma industries over the next few years is thus likely to drive demand for cold storage and reduce product wastage. Cold storage facilities have become integral for promotion of the rural economy as they would link marketplaces across all locations.